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.This point should be made toteam members who are highly analyticalRisk analysisor who perhaps have a tendency to beshould not lead tonegative in general.Also, risk analysis al-ways has a positive thrust—that is, youanalysis paralysis!are asking, “If it happens, what will wedo about it?” You don’t want people to say, “Ain’t it awful!”In Chapter 5, I present detailed tools and techniques to address risk management in the project environment.Key Points to Remember៑ The way a problem is defined determines how you will solve it.៑ A problem is a gap between where you are and where you want to be, with obstacles making it hard to reach the goal.A goal by itself is not a problem.Obstacles must exist for there to be a problem.៑ Vision is what the final result will “look like.” It defines “done.”៑ The mission is to achieve the vision.It answers the two questions “What are we going to do?” and “For whom are we going to do it?”American Management Association • www.amanet.org54Fundamentals of Project Management៑ Objectives should be SMART.៑ You can identify risks by asking, “What could go wrong?”Exercise.Choose a project that you are going to do or perhaps have just started.Answer the questions that follow to the best of your ability.If you need to confer with others to answer some of them, fine.Remember, the people who have to follow the plan should participate in preparing it.៑ What are you trying to achieve with the project? What need does it satisfy for your customer? Who exactly is going to actually use the project deliverable(s) when it is finished? (That is, who is your real customer?) What will distinguish your deliverable from those already available to the customer?៑ Write a problem statement on the basis of your answers to the first question.What is the gap between where you are now and where you want to be? What obstacles prevent easy movement to close the gap?៑ Write a mission statement, answering the two basic questions: 1.What are we going to do?2.For whom are we going to do it?Talk to your customer about these issues.Do not present your written statements to her.Instead, see whether you can get confirma-tion by asking open-ended questions.If you can’t, you may have to revise what you have written.American Management Association • www.amanet.orgCHAPCHTER 5APCreating the ProjectRisk Plans mentioned in Chapter 1, risk management is the systematic process of identifying, analyzing, and responding to project risk.Systematic is a keyA word here, as many project man- A formal, compre-agers attempt to deal with risks onan informal basis with little or nohensive project riskprior planning.Any project managerplan allows the proj-who operates in this manner is invitingfailure, if not disaster.These are strongect manager to bewords, but appropriate for an importanttopic.A formal, comprehensive projectproactive regardingrisk plan allows the project manager tothe innumerablebe proactive regarding the innumerablethings that can and do go wrong with athings that canproject.Without this plan, you areand do go wrongforced to manage reactively whenthings go wrong—easily the most ex-with a project.pensive approach.A systematic processadds discipline and efficiency when creating the plan.At the end of Chapter 4, a high-level overview of the risk process was 55American Management Association • www.amanet.org56Fundamentals of Project Managementpresented.Here we present a comprehensive approach to project risk management.Defining Project RisksProject risk management begins early in the life cycle.A clear understanding of the risks that face the project must be established.The sources of project risk are almost limitless, emphasizing the need for a well-thought-out, detailed plan.Typical examples include the loss of a key team member, weather emergencies, technical failures, and poor suppliers.This section introduces general concepts of risk and briefly discusses what should be done early in the process.Many project managers wait too long to assess risk factors and delay the risk plan because they assume they don’t know enough yet, that there are too many unknowns.This is a common trap that you should try to avoid.During the initiation phase of the project life cycle, an initial high-level assessment ought to be conducted.You and your team members should take a strategic approach to “what can go wrong” and begin laying the foundation for the detailed plan to follow.Without this foundation, projects often experience the negativeimpact of risks that become reality, risksProject risk manage-that might have been prevented or miti-gated through contingency planning.ment is “the processThis is reactive behavior, and you must of conducting risklive in the proactive world to be successful as a project manager
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